Catlin's £2.8bn takeover by XL confirmed, full dividends to be paid

The boards of both companies agreed the terms of a recommended cash and share acquisition by means of a 388p cash payment plus 0.130 new XL share for each Catlin share.

Furthermore, the expected 2014 final cash dividend from Lloyds underwriter Catlin of 22p to its shareholders was confirmed, as well as a further likely 12p special dividend once Catlin has completed the disposal of its investment in telematics business Box Innovation/Insurethebox.

The final price paid for the takeover came after an increase of around 1% in XL’s share price and roughly 4% in the sterling-dollar exchange rate since the initial proposals were set out.

Xl said the purchase price was a 22.9% premium to Catlin's closing price the day before the initial announcement and 33% higher than the volume weighted average price for the the three months previously.

Analysts do not envisage a counter-bid emerging for the Lloyds syndicate.

Shore Capital's Eamonn Flanagan suggested that the valuation of circa 1.54 hit forecast 2014 net tangible asset value of 463p cum dividend was "a healthy premium" for a business which he had forecast to deliver an 10.5% return on investment in 2014.

"Secondly, it is clearly Stephen Catlin’s (founder & CEO) preferred option and comes strongly recommended by he and the board. Hostile bids in this industry are as rare as hens’ teeth. Indeed, we commend management for eking out such an exit."